Meta reportedly begins dismantling $2 billion Manus deal on Beijing’s orders

Meta Platforms begins closing $2 billion Manus acquisition Bloomberg reportThe tech giant is moving to comply with Beijing’s unprecedented order to roll back the deal.

Meta has completed an operational split and ordered employees to stop using Manus tools for internal projects, blocking the Singapore-based company’s staff from accessing the Facebook parent company’s internal data systems starting this month. Bloomberg reported on Thursday, citing people familiar with the matter.

The split comes as Manus and Meta struggle to heed Beijing’s demand to terminate the agreement, which has become a test case for how far China will go to protect its strategic technology and capability.

Chinese regulators ordered the deal reversed in April; It was an unprecedented move that set in motion the complex process of unwinding a completed deal under the country’s foreign investment security review mechanism. According to Zhonglun law firm.

Beijing has since technology export controls tightened Maintain tighter control over cross-border transactions, especially those involving assets in strategic sectors, as the US-China technology race turns into a competition for talent, hardware and data.

For U.S. tech firms looking at Chinese assets, “AI from China now carries a kind of reversibility risk that no smart contract structure can price in,” said Matthias Hendrichs, a Singapore-based consultant to global AI companies.

Hendrichs added that, according to Manus, the issue at the heart of Beijing’s objection may not be resolved. “Once another company’s engineers are in your stack, you can delete the repository, but you can’t make them unsee what they saw.”

Once celebrated as a breakthrough for Chinese AI startups to take on American rivals, Manus has become a cautionary tale for entrepreneurs looking to change China’s image by moving to countries like Singapore.

“The easing could be mixed,” said Han Shen Lin, China managing director of The Asia Group. He said Beijing was sending a message to the tech sector that there were limits to the so-called “Singapore wash” and teaching Washington a lesson that shedding light on ownership structures could be as effective as any ban.

Manus, which has roots in China, moved its headquarters and core teams to Singapore last year before Meta announced in December that it would acquire the brokerage AI startup for $2 billion, triggering a months-long investigation involving technology export controls.

Beijing earlier this month published comprehensive new rules Tightening control of overseas deals involving Chinese investors, technology, data and national security grounds.

The rules come as Beijing and Washington race to tighten their grip on artificial intelligence. Chinese regulators reportedly Washington recently ordered firms including Moonshot AI, StepFun and ByteDance to reject U.S. investments without explicit government approval. AI chip expanded export controls To global companies based in China.

The rules expand Beijing’s access to deals in markets beyond mainland China, including Taiwan, and give it the power to punish foreign firms whose home countries restrict Chinese investment.

Industrial policy analyst Tilly Zhang of Gavekal Dragonomics said the new outgoing investment directives target deals like Manus; It’s a high-profile move that sees a leading Chinese AI firm moving away from the domestic market, an example Beijing does not want others to follow.

Beijing’s new framework essentially provides “retroactive and prospective control” over capital going to the state, Han said. “If Chinese money touches a deal… Beijing can now claim authority over exit, restructuring or reinvestment.”

The framework, which will come into force on July 1, provides for the first time a comprehensive and formalized legal basis for China to force the termination of completed overseas transactions. It bans cross-border talent transfers without approval, especially in sensitive sectors.